Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (110141)	1/2/2002 8:14:27 PM
From: rharshman	Read Replies (3) \| Respond to of 152472

How do you justify a 60 PE for any stock? Market PE's for all stocks will vary at different stages of bull and bear markets- obvious. But under a median circumstances, a company (and they are extremely rare) that can grow at 30% per annum, will increase its earnings 3.7 times in a five year span What multiple is that worth? It will depend , in part, on then future expectations of continued growth, and that, admittedly, gets a bit into fantasyland. But, since we are discussing the theoretical as related to QCOM, let us assume it will earn 1.00 this year and, with a 30% growth rate, 3.70 five years out. If the stock then sells at a 30 PE its price would be 111. If you are satisfied with a 15% compound annual rate of return, that converts to a present value of 55.5, or about 55 times the current low end earnings estimate. Please do not ask me to justify a 30 PE five years out. If the earnings actually do grow at a compounded 30% a year with continued good prospects, the PE should actually be higher. But it is a circular calculation and depends heavily on actual earnings performance. Without a high level of confidence in the earnings future, one should not be in this stock. Of course

To: Wyätt Gwyön who wrote (110141)	1/3/2002 12:27:52 AM
From: Jon Koplik	Read Replies (3) \| Respond to of 152472

Re : comstock -- are these the same comstock people who (in 1992) explained in excruciating detail why : They did not want to be long stocks. They did not want to be long bonds. They did want to be long T-bills and other stuff at the short end of the yield curve. And, most importantly, they really wanted to be long commodities, because they felt very strongly that a major bull market was about to unfold in commodities. They were dead wrong on all four ideas. They missed some of the biggest, easiest investment returns seen in decades. Jon.